Barclays Deputy Chairman Gerry Grimstone said he favours withholding bankers’ bonuses paid in stock for up to a decade to improve accountability, though London’s status as a global financial hub would be hurt if compensation was cut too much.
“I’m a huge supporter of share-based remuneration,” Grimstone, 66, said at a conference in the British capital on Tuesday. He would prefer “moving to a system where a large part of variable remuneration are shares that you hold in the organization for five years or 10 years. When you do that, management’s time horizon extends.”
Bloomberg News reports that banker pay and shareholder returns have been under scrutiny in the wake of the financial crisis amid weak returns from investment banking and as firms seek to fix scandal-tarnished reputations while retaining the best staff. Barclays Chairman John McFarlane has said that the “game is over” for high pay at the expense of investors.
Grimstone said banks are constrained by the need to retain top employees in a global market. The City of London, the capital’s financial district, could lose its place as a global business hub if British lenders “unilaterally” cut pay in half, he said.
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